FAS Russia Imposes $6.75M Fine On Alphabet Inc (NASDAQ:GOOGL) Google


Federal Antimonopoly Service (FAS) Russia on Thursday have fined Alphabet Inc (NASDAQ:GOOGL) Google $6.75 million due to purported industry competition violations.

While this amount might not really affect the company’s balance sheet, it signifies yet another regulatory problem adding up to Google’s dilemmas.

Russian Legal Battle

Last year, Russian antitrust regulators deemed that Google has been abusing its position in the industry by indirectly favoring its services on Android devices over those of its competitors such as Yandex NV (NASDAQ:YNDX). As a result, these rivals are not given the opportunity to offer their services on Android devices.

The Russian technology giant played a significant role in the early stages of the FAS investigation, filing a complaint that Google’s practice of bundling its apps on Android devices does not support industry competition as it deprives other market players.

Google’s Response

The California-based company upholds that it has not, in any way, violated the industry competition guidelines in Russia. Google noted that its apps are only bundled on Android devices if the manufacturers of the smartphones choose to do so. It also reiterated that it is continuously in talks with fellow companies in Russia in enabling them to thrive on the Android platform.

Google is set to file a court appeal against the earlier FAS ruling later this month. As Vladimir Bespalov, VTB Capital analyst, noted, the real make-or-break deal for emerging competitors, particularly Yandex, lies in the court decision following the filing of the court appeal.

As for Google, the Russian market is not really one of its strongest markets on the global front. Accordingly, Yandex owns over 50% of the market share. Consequently, whatever the result of this legal battle may be, will not likely affect the company’s core businesses.

Global Regulatory Challenges

Meanwhile, in Europe, the company is also being challenged by antitrust officials with concerns from telecommunication companies that Google enforces the installation of a suite of apps should users want to install any of them. Given this, the European Commission (EC) has charged the company of competition violations in April as well. Nonetheless, Google maintained its position that it is not engaged in anticompetitive practices, especially on the Android.

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